For the first time on record, households headed by someone with at least a bachelor’s degree received nearly a majority (49.7%) of aggregate U.S. household income; nearly one out of every two dollars went to the college educated. In 2012 one-in-three households was college educated, so, put another way, half of the aggregate U.S. income goes to one third of the households.

While most of the income gain is due to the growth in the percentage of college-educated households, the growing wage premium and the state of marriage may also be influencing the disproportionate income growth among this group.
…

COLLEGE WAGE PREMIUM — The college wage premium has been growing, from a ratio of about 1.7 in 1991 to almost 2.0 in 2010.

… College-educated households are more likely to be married and thus more likely to have secondary earners contributing to household income.

… “assortative mating” … married college-educated persons are more likely to have a college-educated spouse. Thus, they are more likely to have a spouse with high earnings.

Growing divisions?
These trends seem consistent with the idea of a growing class divide in our country. Although it’s doubtful that economic and political divisions completely overlap, it is notable that the growing concentration of economic power among the college-educated elite coincides with what the Washington Post describes as “deeply embedded divisions in America’s politics”.

… People with such degrees were among a relatively small, even elite, proportion of the population believed to have, for example, very high levels of erudition, intelligence, and discipline. Even graduates of mid- to low- quality institutions were viewed as somewhat special. If in, say, 2025 close to half of adults have such degrees, by mathematical necessity, some graduates are at best just about average, not endowed with relatively high levels of the productive attributes desired by employers.

Today we are trending to a place where only graduates of certain elite colleges and those with advanced degrees will be considered “special”.

… Students are clamoring to attend the 25 or 50 top universities and liberal arts colleges in America. Applications are soaring for those schools, while applications for lesser colleges are stagnating as the number of 18-to-22 year-old Americans (particularly those expected to attend college) plateaus.37 In response, new signaling devices are arising
to broadcast true excellence: attendance at a high quality institution, such as Ivy League schools, Stanford, M.I.T., Duke, Northwestern, Chicago, Amherst, Williams, Swarthmore, etc., or getting even higher degrees, such as a master’s or even a doctorate.

With some negative effects on higher education

… unintended consequences, such as the denigration of the value of a bachelor’s degree, a lowering of collegiate academic quality, a growing reputational inequality among colleges, etc….

So, is it worth spending $50-$200,000 to send your children to college?

Families feel pressured to send their children to college because average figures continue to show that college graduates earn more than those without a college degree. But when the data is disaggregated, and the increasing debt burden along with opportunity costs are considered, it becomes clear that parents should be more thoughtful in making decisions about their children’s college plans.

Comparing average college and high-school earnings is highly misleading as a guide for vocational success, given high college-dropout rates and the fact that overproduction of college graduates lowers recent graduate earnings relative to those graduating earlier;

Not all colleges are equal: Typical graduates of elite private schools make more than graduates of flagship state universities, but those graduates do much better than those attending relatively non-selective institutions;

Not all majors are equal: Engineering and economics graduates, for example, typically earn almost double what social work and education graduates receive by mid-career;

For example, a bachelor’s degree-holder from George Mason University who majored in computer engineering can expect to earn $59,000 in his or her first year after graduation, according to the College Measures website, which is 56 percent more than the state average in that discipline. On the other side of the earnings scale, the average George Mason graduate who studied biology earns $32,000, still 15 percent more than peers from other Virginia colleges.

So far, this resource is only available for colleges in Arkansas, Tennessee, and Virginia, but plans to add more states are in the works.

I spent some time looking at various salary comparisons, imagining myself as the parent of a kid in the process of applying to college. The data shows that for a mechanical engineering degree there was not a huge difference in salary outcomes among the various colleges, ranging from $53,441 to $50,917. However, salaries of graduates from several different electrical engineering tech programs showed substantial differences, ranging from $42,223 to $25,141. This is good stuff to know.

For graduates with a bachelor’s degree in economics the average salary was $39,298. But the range was signficant, from $42,895 at the University of Virginia to $29,532 at Radford University. Similar differences were reported for business majors, depending on the specific areas of study and on the schools.

Choice of major makes a difference.

Comparing associate’s degree programs at Northern Virginia Community College, the data averages showed that dental hygienists earned over $59,000 their first year after graduation and radiographers earned about $46,000, but childcare workers only made about $32,000. Meanwhile, EMT Paramedic graduates earned almost $60,000. While other factors besides yearly salary, such as hours worked and previous experience/age of graduate, must be taken into account when making comparisons, this basic salary data is a good starting point.

The individual student makes a difference,

Students, with varying interests, strengths, and levels of persistence self-select themselves to particular schools and majors. For example, a student who lacks the skills to pursue a rigorous quantitative-based major at a top-ranked college has already established the groundwork for the path to particular areas of employment and salary. Within any given field of study, a person who works hard and is strongly motivated by financial success will usually do better than a slacker.

Some shortcomings of the web tool

Only first-year salary data is available, which fails to capture long-term earnings potential. (How will the salaries of the dental hygienist and the engineer compare in 10 or 20 years?)

Only graduates employed in that state are included.

Data for federal employees and members of the military is excluded.

Even with these shortcomings, checking this website could be a valuable wake-up call for students unaware of the consequences of taking on large student debt.

Going with that metaphor, I can see the value of foregoing the luxury cruise ship’s elaborate dining options and luxurious spa pampering if it means getting to the same destination at a lower price. If it’s done right, a no-frills $10,000 college degree can be equivalent to a $200,000 traditional five-year campus party in terms of core learning.